In most credit card merchant account with virtual terminals, there are 2 monthly fees. Generally one of the fees (around $10) goes to your credit card processing gateway. This is the process that reads from the virtual terminal (the web form that customers fill in credit card information), presents to you, for you to decide to charge the credit card, and deposit into your bank account. You can at this point choose to cancel or void the transaction. The payment gateway basically verifies that the credit card in question has enough balance to pay the specified amount. The process is often called “authorization.” When an amount is “authorized,” it cannot be spent in about 2-3 days. If the amount is not actually charged by the merchant (you), the authorization will drop and the amount will become available again.
When the payment gateway authorizes, according to my understanding, it also somehow verifies the authenticity of all the credit card/personal information. The process is a good protection for merchants. According to my personal experiences, payment gateway plays an important role in preventing you, the merchant from being scammed by credit card thieves. It depends on how they program the screening and acceptance.
According to my personal experience, my 1st merchant account used a gateway that was relatively loose and I lost money on a few occasions. The 2nd time around, I did not use a virtual terminal (and thus no payment gateway). I had to make a lot of judgments myself especially when a lot of customers want their orders shipped to addresses that are different from their billing addresses. If you strictly follow the advice of merchant accounts, you will lose a lot of sales. After a while, I decided to get a virtual terminal (and thus the payment gateway). The new payment gateway evidently is very strict. It often declines transactions from an email it “does not like!” I might have lost some sales using this gateway, but it seems to offer a pretty reliable screening so far.
When you are setting up your merchant account, you might want to find out some information about the payment gateway too.